Like many states, New Jersey enacted a legislative scheme aimed at reducing automobile insurance by limiting an injured party’s ability to sue for injuries sustained in an automobile accident. Unlike New York, a policyholder elects whether to be subject to the “verbal” threshold, which was designed to weed out soft tissue injuries from the legal system in return for a reduced premium. A policyholder pays an increased premium if he selects the unlimited tort option. In contrast, New York’s scheme is mandatory and requires a plaintifff to establish “serious injury” as a condition to maintaining a lawsuit for injuries sustained in an auto accident.
What happens if an out of state resident has an auto accident in New Jersey and subsequently files suit in the Garden State? Is the plaintiff subject to the verbal threshold even if the other state has no analogous scheme? The simple answer is “yes” to both questions if the plaintiff is insured by an admitted New Jersey insurer. Pursuant to its deemer statute, New Jersey “deems” any policy issued by an insurer authorized to underwrite insurance in its state to contain the verbal threshold or limited tort option. As a result, a Pennyslvania resident who is injured in New Jersey in an automobile accident must vault the verbal threshold as a condition to recovery where his insurer is admitted to underwrite insurance in New Jersey.